Business Directories

Deloitte, Savills appointed to sell London’s Gherkin

Beirut, August 14, 2014

Savills, a global real estate services provider, and Deloitte Real Estate have been jointly instructed to sell the iconic Gherkin, a 40-storey skyscraper in the heart of the financial district of London.

It follows the appointment of Phil Bowers, Neville Kahn and Alex Adam of Deloitte LLP as the joint fixed charge receivers on the landmark office building.

Marketing of the 46,914 sq m structure at 30 St Mary Axe in the City of London is about to commence with interest expected to come from all corners of the globe.

Designed by Lord Foster, The Gherkin opened in 2004 and is currently multi-let to approximately 20 tenants including Swiss Re, Kirkland & Ellis International LLP and ION Trading.

“This is an iconic City of London development that will appeal to an international audience. Middle Eastern investors continue to actively invest in the UK and in particular central London and we believe given the overall strength of the tenant mix, average unexpired lease terms and the reversionary nature of some of the leases, we will see serious interest from this part of the globe,” said Robin Williamson, head of Middle East Real Estate at Deloitte’s Financial Advisory practice in the Middle East, Deloitte Corporate Finance Limited (DCFL).

Stephen Down, head of Central London Investment at Savills, said: “This is a prestigious appointment on what is a globally recognised landmark building, which sits in the heart of London’s business core.

“The Central London commercial property market has benefitted from improving market conditions over the course of the last few years. Not only have we witnessed a sustained appetite from international investors for assets in London but we have seen a substantial improvement in business growth and take up of office supply as the capital’s economy continues to improve.”

Jamie Olley, head of City Investment at Deloitte Real Estate, said: “For investors, this prime office property provides an attractive combination of stable and reversionary income with opportunities to add value via asset management. The property will appeal to a wide range of domestic and international investors and we are confident of maximising returns to the receivers and creditors.”

The latest London Office Crane Survey by Deloitte Real Estate shows office development has now been running at below average levels for five years, with 9.2 million sq ft under construction across central London. This, combined with a clear rise in office take-up over the last 12 months, has resulted in availability falling to its lowest point since 2007, with 45 per cent of space under construction already let.

According to Savills research, over the last five and a half years, Central London has seen GBP71.1 billion ($119 billion) invested into the office and retail markets, with overseas investors accounting for GBP47.7 billion, equating to 67 per cent of the overall volumes. The research notes that during this time period, investors from Asia Pacific represented 19 per cent of total office and retail transactions, with European buyers accounting for 18 per cent.

US and Middle Eastern investors represented 13 per cent and 10 per cent respectively. The firm also highlights that UK institutions are another current key investor group in the Central London market having accounted for 23 per cent of office transactional activity between January and May, compared to just 10 per cent during the same period in 2013. – TradeArabia News Service